Hearing care provider update - 30 March 2020

Clinical and public health update – UK

All routine hearing care has already been suspended and providers offering essential and urgent care should continue to adhere to official public health and sector specific clinical advice. Please refer to our 23 March update for links to public health and clinical guidance.

At this stage, public health authorities are reviewing personal protective equipment (PPE) guidance for healthcare settings and we will forward this as soon as it is published.

Further guidance for hearing care providers

Safe practice

The UK government has confirmed that audiology clinics are exempt from general retail closures. If you are providing essential and urgent care you should keep up-to-date with official government guidance for employers and businesses on Covid-19 and keep clinical teams up to date with current public health and clinical guidance on Covid-19.

Finance update

We set out the wide range of financial support that is available for hearing care providers in our 23 March update, which you can still access.

The government has now published detailed guidance on:

• Covid-19 business rates relief
• Covid-19 business support grant 
• Coronavirus Job Retention Scheme (CJRS).

Members have approached us about all three schemes and we stand ready to help on a case by case basis. Just get in touch by emailing [email protected].

The Institute of Chartered Accountants offers the following helpful advice on the CJRS:

1. Furloughed members of staff must not work for the employer during the period of furlough.
2. Furlough is from 1 March 2020, so is to be backdated. It will last for at least three months and will be extended if necessary. Note: the scheme is backdated to the beginning of March as it is intended to support all those employed then. A firm will only be eligible to claim the grant once they have agreed the furlough with their staff and staff have stopped working for the employer. This will of course be subject to employment law in the usual way.
3. The scheme is available for employees on the payroll at 28 February 2020.
4. All UK businesses are eligible, ‘any employer in the country, small or large, charitable or non-profit’ to use the Chancellor’s words.
5. The scheme pays a grant (not a loan) to the employer.
6. The grant will be paid to the employer through a new online system which is being built for this purpose. There is no detail about the application process at the moment.
7. The employer will pay the employee through payroll, and report payments to HMRC using the Real Time Information (RTI) system as usual, as required by the employment contract. This contract may be re-negotiated, but that is a matter for employment law.
8. The scheme will be administered by HMRC:
   • Relevant employees must be designated as furloughed employees
   • Employers will submit claims to HMRC through a new online portal
   • As the system will take time to build, businesses should look to the Coronavirus Business Interruption Loan Scheme to support cash flow in the meantime. The narrative used in the information released so far says ‘if your employer cannot cover staff costs due to Covid-19 they may be able to access support…’. This is a conditional phrase which may relate to existing funds available to the employer. We do not yet know how these might be determined, nor whether there is a bar of some description.
9. The maximum grant will be calculated per employee and is the lower of:
   • 80% of ‘an employee’s regular wage’ and
   • £2,500 per month.
10. Plus, the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrolment employer pension contributions on that wage.
11. Fees, commission and bonuses should not be included.
12. This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto-enrolled pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.
13. Any employee who was made redundant after 28 February 2020 but was on the payroll on 28 February 2020 can be re-employed and furloughed.
14. An employee must be furloughed for a minimum of three weeks before they can be re-employed and a different employee (on the payroll on 28 February 2020) can be furloughed. This will ensure flexibility. 

Financial support for the self-employed

Our last member update included details on financial support that was available for self-employed members. In addition, some members might also now be able to access support via the new Covid-19 Self-employment Income Support Scheme.

The scheme will allow eligible self-employed members to claim a grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months – i.e. a maximum of £7,500. Although the government has said it might extend the three-month period later.

If you are eligible the grant will be paid in one instalment. We strongly recommend self-employed members read this HMRC guidance in full to see if they are eligible. Please get in touch if you need any help by emailing us: [email protected].

We draw members’ attention to the following criteria in particular:

“Self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

• Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.

“If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.”

If you offer services through a limited company, you will not be eligible for the Covid-19 Self-employment Income Support Scheme. However if you are paid through PAYE you may be able to get support using the Job Retention Scheme. The scheme does not apply to dividends.

We know this will be disappointing news to some self-employed members. It is also particularly unfair on single earning households as it does not take account of family income, and we will be raising that on your behalf with government through our links with the CBI. At this stage if you’re not eligible for the self-employed scheme announced yesterday, you should ensure you review the following government support:

• Deferring your self-assessment income tax payments and VAT payments
• Grants for businesses that pay little or no business rates
• Increased Universal Credit 
• Business Interruption Loan Scheme

Please also see our 23 March update for other support and advice.